The Racial Wealth Divide in America
Start lowering your debt today.Call 800-449-0273.
The racial wealth divide is a sociocultural trench that runs deep and dark through the sea of American history. As “woke” as today’s generation may be, there are startling facts and statistics that prove the dissidence in wealth is an issue we need to pay closer attention to.
To mend the gap in a meaningful way, we need to acknowledge parts of America’s past—all of our past—that give the racial wealth divide its roots. Here to help us start the conversation is financial expert and social educator Dyalekt. With a background in Black Studies and a profession in financial wellness, he is able to look at the issue from every angle. He’s able to provide us with a truly unique and complete perspective on a topic that is anything but black-and-white.
Racial Wealth Divide: Studies & Stats
Dyalekt: The racial wealth divide. It’s really a fascinating study and there are a number of folks who do this: Prosperity Now, NCRC, Policy Link, the Institute for Policy Studies. A number of really great statisticians and policy folks who basically take all of the stuff we anecdotally know about race and wealth and put real numbers to it and quantify it in a way where it makes a lot of sense.
It’s terrifying as it is. It would take 228 years, if we were to turn things around, for the average black family to catch up to the wealth of the average white family. If things continue to go how they’re going, median black wealth will be zero by 2053. Harrowing stuff. It reminds us about how we never dealt with race in this country, particularly the whole black-white fabrication.
Based on Data from The Ever-Growing Gap (Institute for Policy Studies, 2016)
Because we’ve never dealt with it, the deleterious effects of race and racism have been able to continue. It’s something that has harmed a majority of people of color, and is something that continues to harm all of us. Of course, it harms us from a social perspective where if we know less about each other and treat each other as enemies or with less empathy and respect, then we’re in a bad place socially.
But also on the money tip: right now you can see the racial wealth divide shows that white families tend to have more money than families of color. It’s something that is positively affecting white American families, but in a decreasing fashion because this racial wealth divide is tied to overall income inequality. So basically you can look at the origins of this kind of thing as far back as Bacon’s Rebellion and why race is what it is here.
The Origins of America’s Racial Divide
For folks who aren’t familiar, Bacon’s Rebellion was when the Irish indentured servants and the African slaves worked together to have an uprising. They didn’t win but they scared the slave masters and debt collectors enough so that they changed the rules, gave the Irish a little bit more responsibility, a little bit more favor, and told them that the blacks were the ones who were making their life worse. Then they told the black folks that the Irish were the ones making their life worse. They built this whole thing.
I always like to share this semi-origin story because we always think about race as this real thing that exists, this genuine animosity that comes from some mystical place that we don’t understand. It’s real and it’s not. It’s mundane. It’s a simple business decision. These guys were basically saying, “Hey, all of these guys are running away. It’s way easier for us to corral the ones who don’t look like us because they’re easier to physically tell apart than to pay super hard attention to the ones who do look like us. So the ones who do look like us, let some of that slip through your fingers, loosen your grasp a little bit and you know what as an added bonus, blame each other for each other’s situation. So then they’ll squabble with each other and not us.
It’s dumb simple. All the emotional stuff came after it. There have been a lot of rationalizations that were made and built up around it. One of the things that I’ve been teaching a lot as we’ve been going around the country is talking about how culture has allowed for these things to happen. By culture, I mean your arts and sciences because there was phonology back in the day, which was a scientific explanation of why other races were inferior and therefore, it was okay to mistreat them. Then you had your art, your minstrel shows, your books, and your plays, which came out to show why these people were inferior and it was okay to mistreat them.
Uncle Tom’s Cabin
Those are things that continue today. Not to get into all of those things, but I’ll throw a quick one out there: Uncle Tom’s Cabin.
Most of us haven’t read Uncle Tom’s Cabin but we’re familiar with it because it was a famous book. It was the number one book in the country. Everyone loved it. It was like wildfire going throughout the country. With black Americans, the term “Uncle Tom” is calling another black American a sellout. The book was very popular around the 70s, but the term still exists. It’s weird because if you read Uncle Tom’s Cabin, Uncle Tom is not the stereotypical Uncle Tom. He’s actually very brave and bold and he dies being whipped to death because he won’t give up the location of slaves that escaped.
This book was very popular and was changing the minds of how people felt about African slaves. So people started putting on plays, minstrel shows. It was the TV of the time where they depicted the characters from the book as the stereotypical black caricatures that I’m sure you’ve seen or heard of in these types of shows. They show them to be dumb and chipless and cowardly. And they did such a good job of it that they obliviated this book, and then made it the term for a black sellout that was used in the black community. That’s just one example of how big an effect these types of propaganda have on us, and how that affects our policy decisions and it affects our personal finance decisions.
Separating Myth from Reality & Income from Wealth
Being from a black mother, I’ve been told not to send back a steak at a restaurant because they’ll spit in it. What that translates to is, when I get a funny bill on top of my bill, like say, I’ve got my cable bill and there’s an extra charge, I don’t call and dispute it because I’ve been told in a lot of different ways not to rock the boat, not to get these people who run things upset with me. So I don’t question.
Having an understanding of these things and where they come from gives me more of an ability to trust in my rational mind rather than allow that nagging instinct to hold me back. In fact, I did a keynote at the AFCPE conference about this where we had a number of financial coaches that we’d been working with for a year who we gave the racial wealth divide stats and had them talk to their clients about it.
They wanted to see if talking to their clients brought about a change in how people felt about their finances. There was a profound change because when you talk about shame and money and how we’re often shamed about it, with the imposter syndrome of it all, people of color, in particular black Americans, have been told so many times, it’s real. Your imposter syndrome is real. You’re not smart enough, you can’t do it.
When you learn the reason why all the white families in your neighborhood have a house and you don’t have a house is because of the Homestead Act of 1862 (where families were just given land for free) or redlining in the 30’s-70’s (where mortgage lenders literally drew red lines on a map to keep Black families out), you can see things through a different lens. When you see that, then you can see why a Zuckerberg could drop out of college to start his new website—because he was going to be okay.
This is why you’ll see black families and families of color, even when they are at Harvard or they are making six figures, have lots of obligations and lots of things that are more precarious because they don’t have wealth. The racial wealth divide has been teaching a lot of folks that there’s a difference between income and wealth.
If both of us are making 100K a year, that’s cool. But I’m sending money to take care of my mom back home. I’m the first one to go to school, so everything is all on loans. We don’t have anything backing that up. I can’t drop out if I’m going to Harvard. I can’t drop out to try out this new website. I can’t take a risk because instead of risk, we are often forced to sacrifice. That first generation college kid who’s going to Harvard is not a legacy and their parents had to make some sort of sacrifice for them to get there. So it’s a collective thing. We’re all there.
We can’t take the risk of like, “Well, what if this Facebook thing doesn’t work out?” If Facebook didn’t work out, Mark Zuckerberg would have been fine. He would’ve gone and stayed with his parents for awhile, got his stuff together and figured his life out. He’s a smart guy, clearly, so he would have been able to do it in some other area. But for so many of us, even with me coming up to the States and going to college in New York: if things didn’t work out, that was it.
I remember I was avoiding my mom’s calls when I was not doing well financially because I knew that if I had to come home, that was it. I was just going to be home and any of my aspirations were going nowhere. I knew that because I had some friends who came to New York with me trying to build stuff and they went home and they never came back.
It’s All of Our History
Let’s bring it back to working directly with folks and knowing and understanding the racial wealth divide. The racial wealth divide isn’t like a “blame game” thing. It’s not even a “get angry” or “hate white people” thing. It’s a thing that I think white people should know and understand as well because it’s American history and American history is all of our history. I had a number of white financial coaches who were unsure about how to share this information with people because they thought, “Well, I’m not of this background, so it’s weird for me to share this knowledge with them.”
This is one of the problems: we are afraid to share with each other and we’ve been conditioned to be afraid to share with each other. I think having numbers, having the facts and figures that have been put together by peer reviewed researchers, takes a lot of the emotion out of it.
It allows us all to breathe and go, “Okay, this is where we’re at, this is how they got there, these are my options, this is what I can do about it.” Even if you’re going to be angry, I always say, feel free to be angry because injustices happen and a lot of things we live in are built on injustices.
Feel free to be angry, but make sure it’s a righteous anger, an anger that sparks some creation. The racial wealth divide statistics and figures have been able to really help people loosen the grip that shame has on how they feel about money so that they can start making financial decisions in accordance with their values.
I mean, I can talk way too long, especially about the racial wealth divide stuff. I came into finance through my wife, through the Brunch & Budget podcast, and my education work. But in college, I studied Black Studies and I have been talking about the cultural, structural inequities brought on by the concept of race. So when I started seeing the racial wealth divide folks, I had the background to connect race theory to personal finance.
About MC Dyalekt
Dyalekt is an MC, educator, and playwright, usually all at once. He is based in Brooklyn, NY and has been a part of the NYC Hip Hop scene since 2003. He toured his first solo work, Square Peg Syndrome, throughout Europe, which led to him being named to The Public’s Emerging Writers Group in 2013. The album/one man show is also a 6-week curriculum on identity and literacy, piloted in 2008 in his hometown, St. Croix, USVI. He is the Director of Pedagogy for Pockets Change, a Hip Hop + finance youth organization, and has taught thousands of students. His most recent work, the Museum of Dead Words, is a Hip Hop theater show on communication and empathy in the age of the internet.
He is a podcast host for the Race & Wealth Network and keynotes on how art, culture, and media are used to perpetuate racial wealth inequality.
Opinions & perspectives expressed in this article are those of the guest contributor and not necessarily Pocket Your Dollars.